Corporate Board Diversity
Investors, customers and the general public are demanding that the board of directors of a company reflect the demographics of the community it serves. The inclusion of diverse members improves the effectiveness of a board and also gives it a more positive reputation as an employer. Diversity in corporate boardrooms means different things to different boards and companies.
The most widely used definition of diversity includes ethnicity and gender, but the benefits of diversity go beyond these basic aspects. Research suggests that boards with a higher diversity of experience are less likely to fall prey to groupthink. The theory is that directors with different backgrounds and perspectives are more in arguing against each other’s points of view to create robust discussions, test alternatives and make more informed decisions than directors who https://board.international/how-to-increase-corporate-board-diversity/ have similar backgrounds.
It’s hard to argue against the necessity for more diversity on corporate boards however, it isn’t easy for board chairpersons and executives to determine the most suitable candidates. Some advocacy groups offer lists of possible board candidates however they aren’t typically in the network of chairpersons or have never been considered for top management post.
Boards can begin by conducting an audit of their current member profiles. They can then utilize their annual evaluations in order to remove members that are no longer productive and identify new talent that reflect the future state of the company. They can also use their network of advisers and consultants to identify the trailblazers that aren’t part of their homogenous director pool.
